Among all the factors impacting oil prices -- many years of underinvestment and little spare production capacity, expectations of long-term demand growth in China and other countries in the South, dollar depreciation, pension funds and others investing in commodity futures, failure to massively invest in energy conservation and renewable fuels, etc. -- the only one that is entirely and immediately under Washington's control is some of the geopolitical risk premiums that it has foolishly created itself. Most importantly, it can tell Israel to shut up, and accept nuclear Iran. Maybe even the Bush administration has finally realized that: Elaine Sciolino and Steven Lee Myers, "Policy Shift Seen in U.S. Decision on Iran Talks" (New York Times, 17 July 2008); and Ewen MacAskill, "US Plans to Station Diplomats in Iran for First Time since 1979" (Guardian, 17 July 2008).
See? It's already working: "'There's been a lot of talk about what the administration would have to do to lower oil prices,' [John] Kilduff [vice president of risk management at MF Global Ltd. in New York] said. 'Making a peace overture to Iran is doing the job'" (Mark Shenk, "Oil Falls for a Fourth Day as Iran Talks Ease Supply Concern," Bloomberg, 18 July 2008). Fast relief!
Be sure to communicate this message to the White House and the Congress: no peace, no oil. Make peace with Iran, whether or not it suspends uranium enrichment.